Chapo Trap House - Bonus: The Andrew Yang Interview

Episode Date: July 18, 2019

In the latest installment of Chapo’s Presidential candidate interview series, Virgil sits down with entrepreneur Andrew Yang. The two tackle Yang's views on entrepreneurship, automation, whether Virgil is good, and socialist critiques of his Universal Basic Income proposal.

Hey, everyone, Virgil Texas here, and joining me today is entrepreneur and presidential candidate Andrew Yang. Andrew, thank you so much for coming. Oh, thanks for being here. It's a pleasure. Is it? No, I mean, it's a very nice studio. We're surrounded by Persian-looking furnishings. Yeah. Yeah, so that's imported. This is some pretty easy campaigning duty in this game of presidential run.

Yeah, we got that. That was a violation of the embargo to acquire that Persian furniture here at the Chappell Park Slope Mansion. Your campaign has picked up in the past few months and you've been running for well over a year now on the basis of your big UBI proposal, and that's something that you write about in your book, The War on Normal People. Yes. But I want to go back and start the conversation with your first book, Smart People Should Build Things. And what's interesting to me about this book is you wrote this before you were running for president while you were an entrepreneur, and you were working for

a firm called, a nonprofit called Venture for America. Yeah, I founded Venture for America in 2011. And what's interesting about the book is you make it personal and you talk a little about your back story. But whereas someone like Pete Buttigieg wrote a book and spends the entire time talking about, you know, I went to college and I was exposed to these wonderful new ideas. And then I worked for McKinsey and it was great and I learned how to manage. You spend about three pages covering that part of your life and you say, yeah, I didn't know what to do. My parents said to go to college and be successful. So I went to college

and it was fine. And then I got a job at a corporate law firm making six figures right out the gate and it sucked. It did suck. And my life was probably about three pages worth of interest. Yeah, so as you know, I mean, when I wrote that book, Political Run was nowhere in my thinking. And I'm even as you know, having, you know, read the book that's most associated with my campaign, I still devote the vast majority of it to the problems that we're facing, which I think are much more interesting than any reflections on my formative years. Oh, sure. Absolutely. But it does, you know, I mean, your reflections do come from that

personal experience. And one thing that's interesting is that, you know, you say explicitly and this must be in part how you derive the thesis of the book, that it sucked. You worked for a corporate law firm, you made more money and you observed that you made more money than your father, who has a PhD, numerous patents ever made. And this was six figures in your 20s, which for most people, that's a good deal, right? Yeah, it's funny, Virgil. So I remember I was 25. I did have 100,000 in law school loans, which made a high-end corporate job more appealing. Unnecessary.

Unnecessary, though, you know, as you could see from what I did next, I guess I felt like, you know, I shouldn't be constrained by my debt load. I used to call it my mistress because it was like writing a check to a family in another town. It's like, I hope they have a really good time in that town. Here's like, they're $1,100 a month. Well, I'm kind of something of a deadbeat dad in that respect. You know, there are too many deadbeat dads in this country because we all have these educational loans weighing us down. And one of the things I would love to do as president is just forgive a truck ton of it, most of it, all of it. Because, you know, we have

to ask ourselves, would we rather be weighing down the futures of our young people or freeing people up to do the kind of work that they want to do, starting families, buying homes, starting businesses, making their communities better? To me, that's a very easy choice. But you know, to your point, I spent five months as an unhappy corporate lawyer. And I remember vividly saying, it's like, okay, this job sucks. Why am I doing it? Everyone else is miserable. Yeah. I called it, I called my firm a temple to the squandering of human potential because there were hundreds of bright people that were there that were doing ridiculous like

soul crushing work. And so I said, well, I must be doing it for the money. So then I went to Bloomingdale's and I bought my family some like nice clothing, and I brought it to them that weekend. And then I gave it to them and they seemed to like it. And I was like, okay, that was nice. Was that nice enough for me to do a soul crushing job? No. So I should quit. And so I quit after five months to start an ill-fated dot com business that flopped and crashed and burned over the, you know, next year plus. And you also noted that just from observing your coworkers and your own progress at that job, even though you were only there for a few months, that if you had continued on,

it would have rewired your brain. Yeah. That's why I left so fast. I realized two things. One, it was going to be harder to leave, not easier over time. Two, I did not want to do this job forever. And three, it was making me better at the job every single day I was there. So if those three things were true, then I was like, okay, I must leave as soon as possible because like if I stay here too long, I'm going to become this burnt out version of myself that can actually do this fucking job. Am I allowed to swear on this podcast? Of course. Nice. Holy shit. That's liberating. So you followed your heart. Essentially, you made the choice that quite a lot of people

either have made or just want to make, which was that, you know, well, this socks, and I'd rather just do what I want to do. Yeah. And again, I was like 24, 25 at the time. I was somewhat callow, but I did say like the real danger here is waking up years from now and being a shadow of myself, being someone I'd be ashamed to be. And that's the danger that most people don't take into account, because if you stick around too long, we're very adaptable. Like you can become a toolbox. If you hang out with toolbox is long enough. So for you, but you know, following your heart, following your dream was being an entrepreneur and you talk about how if you had continued on that soulless job, you would have wasted

your potential. So therefore, you know, you have this, you place a value on being an entrepreneur. And I go to a different conclusion, even though my story is somewhat similar, which is that I also rejected having a, you know, an office job and a corporate work and things like that. But I rather than being an entrepreneur, I just kind of want it to be a piece of shit. And the thesis of your book smart people should build things is that there is there is and this is 2013, 2014 is there's a labor imbalance. There's a distortion, a matching problem in the economy, where too many smart people and you're defining smart people as people with, you know, advanced degrees for good institutions and things like that, too many smart people

are we're going into Wall Street, we're going into law and management consulting, management consulting, following the mayor Pete route and not enough people were being entrepreneurs. Why is being an entrepreneur better than going to an older firm or one of these specialized positions? You know, so I can just relate my own journey and people who are listening to this can possibly relate to parts of it, though I will say my thinking has evolved since 2013. So I'll just share a story of my 20s. So I start this business, it flops, my parents are still telling people I'm a lawyer. I owe these loans that did not go anywhere. And so I then worked at another company that law that ran out of money. And

one of my coworkers moved out his apartment started living in the conference room. And then I went to work for another company that did not accomplish its goals. And I'd been so burnt at this point that I had two side jobs because I just believed that any job could disappear. Now this was in the wake of the first calm crash. And so to me, there was this journey throughout my 20s of trying to find work that I was excited to do. And I believed and still do believe that this is one of the most important things that everyone is pursuing. The problem right now is that most people look up and say, okay, all the jobs blow. You know, it's like there's nothing here for me. If I did join one of these firms,

they would treat me like shit. They would not give me any benefits. They would treat me as a temp worker. They would try and get rid of my job as soon as possible, all of which is true. 94% of new jobs that are created in this economy are temp gig contractor jobs. And so I was very fortunate where after a whole series of misadventures, essentially, I joined another company that ended up growing. And you know, I was the leader of the company after the founder named me as successor. And so that was like a huge step up for and so many levels. Like I met my now wife during this time. Like, you know, I became what felt like a head of a household on a business setting because I employed dozens of people and treating

those people well was one of the great joys of my career up to that point. And so the goal for me was like, wow, more people could have this sort of experience like I had, which was not a straightforward or easy one. But that would be great not just for them individually that they could do work they're excited about and work with people they liked, but also be better for our society and economy because you'd end up creating different types of jobs and opportunities and businesses. How has your thinking changed from smart people should build things? What would you redact from smart people should build things? You know, so what happened to me over the last number of years is that I got married.

I had two kids, one of whom is autistic. And I was cocky going into having a child because I was like, a lot of people have had children throughout the course of human history. Like this can't be that much, you know, of a lift. And then it was like a bomb went off in our house. And it tested me, my wife, like our marriage. During that time, I was an entrepreneur. I'm still running venture for Americans organization. I'd started and seeing imagining what other families had to go through. Let's say you were a single mom, you didn't have a partner. And if you had a special needs kid, like I realized that I'd been incredibly fortunate where I was in a position where I could plausibly try these things in my 20s and then try and

fail and like, you know, not starve as a result or not die as a result or not have like, you know, my family lose their home as a result. It's a privileged position. Yeah. And I realized how distinct that was. And that the rules of our economy had changed such that we're going to be shredding and shedding opportunities and much higher levels than we're creating them. And so that we need to evolve to like a totally different economic approach. If we're going to give our human values a chance, because the market's not going to, again, like if all the jobs we're creating are these shit jobs, then the market's not going to do humanity any favors. And so what we have to do is we have to actually

rewrite the rules of the economy for ourselves. Well, in Spark, people should build things. You do note that there are some people who just cannot be entrepreneurs because of their circumstances and that you're namely addressing the group of people who they have a family to fall back on. They can just sort of screw around in their 20s and, you know, maybe create that next unicorn. But you don't hold that view any further that entrepreneurs are these necessary job creators. Oh, I love entrepreneurs. And I would regard you as the opposite of a piece of shit. I mean, like you're like, we're in your studio, you know, you like co-wrote a bestselling book,

like you have this, this media outlet that reaches hundreds of thousands of like-minded people built like a whole tribe helped shape history of the country. So I mean, like you're an entrepreneur, a lot of people listening to this are entrepreneurs in various ways. And I don't mean entrepreneur in this bullshit, like, oh, start a unicorn like nonsense, because that's not real. It's like, you're like people are entrepreneurs. One of the comparisons I make is like, if you're a parent, you're an entrepreneur, because you have to freaking, you know, try and figure out the future every single day, you know, in a thankless, gritty, you know, ill-defined way that. So I suppose like the big change I made is that, you know,

you have to define entrepreneurship really by letting people pursue the things that they want to do that are actually driven by their values and not the marketplace. Who creates jobs? How are jobs created in this economy? Because in smart people should build things. You seem to have a definite opinion. It's entrepreneurs, it's young firms as opposed to old firms, which are people should not go into because you're just kind of fighting over, you know, Mature strengths. Mature strengths.

Yeah, yeah. And that's the, that was the data. I mean, the data was that 70, 80% of job growth in this country was produced by young firms that were 10 years old or newer. And that if you looked at mature firms, they would lay people off, they would hire some people, but they would essentially remain in equilibrium or balance. And so if you wanted job creation in your community, you should look at young companies. So that has been the historical norm in the United States. The problem is that new businesses have not been forming at the same levels as they had in past times because we're in an era of mega consolidation.

All the community banks have gotten gobbled up. Like all the retailers are closing because not just big box stores, but now Amazon's, you know, almost half of all online retail. And so let's say that my original thesis was like, Hey, entrepreneurs start businesses, then you have to be rational and look around and be like, well, we're not starting as many businesses anymore. Like, why is that? I mean, like, well, has America gotten less entrepreneurial? By the numbers? Yes. Is it true that we've made the setting much more hostile towards entrepreneurs in various ways by, let's say, loading them up with school loans and consolidating all these industries

and making it so that, you know, if you want to start a hardware shop or a flower shop, it's a total terrible idea. And like, you shouldn't do it now. Yeah. Like all those things are true. Isn't that the market working as it should? Well, that's the market. That's our current version of the market taken to its extreme. And one of the things I say is that technology and capital are now converging in unprecedented ways. And one of the biggest nonsense factors in our culture right now is that the internet somehow is like the spur to entrepreneurship. It's a spur to being a task rabbit or selling

a few things, Chachki's on Etsy. But it's actually making it much harder to start businesses in many sectors. We have right now, and I know that this rate means a certain thing, but we have some of the lowest unemployment we've had on the top line numbers in many, many years. And you know, even though a lot of people have dropped out of the market and you acknowledge that a lot of these jobs are transitional gig economy jobs without benefits and dependent contractor and things like that, it's still a tight labor market, right? I mean, we've seen faint glimmers of real wages going up for the first time in several decades, which is a pretty good

indication that firms are fighting over labor. But how do you square that with your notion that there aren't enough startups creating jobs? Well, as you said, a lot of the jobs we're talking about are temporary gig or contract. So the headline unemployment rate is a terrible indicator on so many levels. It doesn't take into account the labor force participation rate, which is still 63% close to a multi-decade low in the same levels as Ecuador and Costa Rica. It doesn't take into account affordability. So if you're doing a shitty job that doesn't pay you enough to get by, well, you're employed. It doesn't take into account under-employment. Under-employment of recent college graduates

is around 44%. So there are many thousands of people who have these school loans and are doing jobs that don't require a degree. And we're in year 11 of an expansion, which is very long in the tooth for most expansions. And so the fact that you're seeing some wage growth at the margins, we should have seen it years ago. This set of numbers is not the numbers we should be looking at. If you look at affordability in a really tough spot in terms of stagnating wages, if you look at the proportion of people who have to have multiple jobs to make ends meet, it's at record highs. If you look at stress levels, record highs, depression, suicides, anxiety, drug overdoses, all at unprecedented levels. And so the fundamental

shift that has to happen in the U.S. is that we have the wrong measurements. The three big measurements that the media will throw around are GDP, which is at record highs, but again, our life expectancy is actually going down, so which do you care more about. Headline unemployment rate, which doesn't include people who drop out or under-employment or affordability. And stock market prices, which have very little relationship with most Americans. The bottom 80% of Americans own 8% of stock market. Well, at the bottom 50% they own essentially zero. So anyone just cheerleading the stock market is just cheerleading the top 20%. And so if you're 80% of us, you just really don't care that much. And so what

we need to do is we need to actually evolve to the next form of measurements. So instead of having these three phantom measurements that are less and less relevant, we should be measuring our health and life expectancy, our mental health and freedom from substance abuse, the proportion of Americans who are actually doing work we want to do, how our kids are doing, how clean our air and water are. And this is one of the cornerstones of my presidential run, is that I will update our measurements to the 21st century, which will help us actually start seeing how bad things are going. Again, our life expectancy declining for the last three years, that's not normal in any developed economy. The last

time that happened in the United States of America was 1918, the Spanish flu. Literally we're in Spanish flu territory because of drug overdoses and suicides. So that's not a sign of sickness in our economy. I don't know what is. So you were saying that between smart people should build things, your first book and your second book, The War on Normal People, that your thinking has changed a bit and that your emphasis is less on entrepreneurs doing something that's economically necessary. What is your emphasis now? My emphasis now is that we have to rewrite the rules of the economy to measure the things that are important to our people, put economic

resources directly in our hands as a right of citizenship, just have a dividend of $1,000 a month for every American starting at age 18, and own the fact that what worked in the 20th century is not going to work in this century, that we're seeing unprecedented changes in the labor market. If you have cars and trucks that can drive themselves in 10 years, that's going to displace literally millions of American workers. And imagining that those workers are just going to find their way to new opportunities is nonsense. It's more of a fantasy than anything else. And so we need to make big changes as fast as possible. So what is The War on Normal People? The War on Normal People is that our economy

is designed to try and make things more and more efficient. And unfortunately, that efficiency will not require people in many, many settings, where if you have cars and trucks that drive themselves, that's great for the freight companies, that's great perhaps for certain customers. That's going to be very, very bad for the three and a half to four million Americans who drive a vehicle for a living. And so The War on Normal People is that right now some of the smartest people in the country are working on autonomous vehicles because there's a ton of money in it, $168 billion a year in potential cost savings to automate away truck driving alone. Now if they succeed, it's going to be disastrous for many American workers and

the communities because right now over 7 million Americans work in truck stops, motels, diners and retail establishments that rely upon trucker stopping every day. So The War on Normal People is that we have these twin cannons of finance and technology that are hell bent on making our economy more and more efficient. And unfortunately, many of us are going to get left behind. Hasn't that always been the case? Yeah, that has always been the case except some of the innovations that are coming out now would have been unforeseeable even 10, 20 years ago. It's like we literally have

supercomputers in our pockets, 30% of malls are going to close in the next four years. And things that you would think of as being intrinsically human or creative or emotional can be increasingly done through AI and advanced technologies. And so this has happened before it has never happened this dramatically, this quickly, this pervasively. It just seems to me that capital has used technological advancement over the past, well, the entire history of capitalism is the consequence of technological change as a change of the actual means of production in society. And there have been since that emergence some 200 odd years ago, there has been a series of huge technological shifts, which good example is

we used to have telephone operators, we used to have human calculators, big warehouses full of people, we don't have that anymore, and it takes fewer people to say manufacture a car than it did in Henry Ford's day. And yet, somehow, what should have led to mass unemployment, things like that, time and time again, the economy has reabsorbed labor has found use for labor that perhaps might be worse, maybe you could argue labor is worse off than it was, say, 40, 50 years ago with the heyday of American manufacturing before we, you know, transition to a service economy. But it's not, it hasn't been apocalyptic, right? It hasn't been the great replacement is displacement, displacement, as you say

in your book. But you think that the automation is different now. Yeah, I do. So you can think of this as the fourth industrial revolution. The first was steam. The second was assembly lines and factories. The third was internet and digitization. And this one's the fourth one, which is AI robotics, software, big data, autonomous vehicles, internet of things, genetic engineering, like, there are a lot of technologies that are now coming online that if you look at expert predictions from MIT or Bain or McKinsey, they're projecting that this is going to be two to three times faster and more pervasive than the last industrial revolution at the turn of the century, or the the second industrial revolution, which

included mass riots. If you look at the early 20th century, labor unions came about to start fighting for worker rights. We had Labor Day as a holiday because of mass riots that killed dozens of people and caused the equivalent of billions of dollars worth of damage. We implemented universal high school in 1911 in part to try and educate people more for what we thought was like the workforce of the future. So experts are saying this is going to be two to three times faster than that one. And if that one included mass riots and massive social change, then you'd expect this one to do the same. Haven't capital been employing automation for the past few years now? Or are you just,

are you talking about a potential, a hypothetical, with what you're describing totally distinct from that, from various say, you know, labor saving, you know, robotics, things like that? It is distinct with the with the power, the speed, the severity, and the different sectors of the economy it will be applied to. But it's still a hypothetical. I know, I would say it's not a hypothetical. And this is one of the reasons why I'm running for president and why I'm so passionate about this is when I started digging into the research for my book, the second book, I was shocked at how clear the picture was in the data,

where we automated away four million manufacturing jobs in the Midwest and the South. And those workers never recovered. Half of them left the workforce never to be heard from again. And of that group, half filed for disability. And then you saw surges in suicides and drug overdoses at unprecedented levels in those populations. And I spent six and a half years in Ohio, Michigan, Missouri, Louisiana, Alabama, trying to help create jobs and help entrepreneurs. And I was stunned by what's going on in many of those regions. And if you drive an hour and a half out of those regions, the picture gets even more stark. So none of this is hypothetical. During the third inning, we've wiped out these millions of manufacturing jobs and led to

Donald Trump becoming president. We're now wiping out millions of retail jobs, call center jobs, fast food jobs, truck driving jobs, and accounting jobs. I was a lawyer long enough to know that you can automate a lot of that job. And there's AI that's now doing legal work. So this is not necessarily just a blue collar thing. This is an everyone thing. Is that displacement, the hollowing out of middle America, the destruction of the manufacturing center, is that because of just automation? Well, the studies I've seen, we went from 17 million to 12 million manufacturing jobs in this country from 2000 to 2015. And the studies I've seen said that 80% of that 5

million lost jobs was due to automation and technology. So we automated away 4 million jobs in Ohio, Michigan, Pennsylvania, Wisconsin, Missouri, Iowa over the last number of years. If we have seen supposedly these gains from automation, shouldn't worker efficiency have gone up because it's been stagnant for the past several years? Yeah. And this is one of the quandaries in the data, is that worker productivity has been stuck. And there was an economist named Ryan Avent who looked at this. And he said that one reason was that workers are getting pushed into lower and lower productivity roles because they have no choice but to do something to survive. And then if you're an employer

and someone's willing to work for you for very little, then you just pay them that much. And that's what we've seen. We've seen stagnant wages. We've seen stuck productivity. So a lot of this is because people are getting pushed into low productivity sectors. But another facet is that all of the data will always be backward looking, where none of the data will ever account for something like self-driving cars until there are tens of thousands of cars on the highways. So if you wait for the data, you will be too late. So your UBI proposal is a response to the displacement. Yes. If you accept that we're in the midst of the greatest economic transformation in

our history, that we're getting rid of the most common jobs in the economy, which we are, that more and more Americans are going to have a harder time finding paths forward in our market economy as it's currently designed. And if you think that it could even lead to widespread social unrest as towns and ways of life disintegrate underneath our feet, then you start looking for real solutions, commensurate solutions. And if you look at our history, the idea of an American dividend has been with us since the founding of the country. Thomas Paine was for it. Martin Luther King was for it. Alaska's had a dividend in place for almost 40 years where everyone is getting between one and $2,000 a year. So my plan,

the freedom dividend, would put $1,000 a month into the hands of every American adult using technology money because AI and software and robotics will produce untold value in the seasons to come. And if we create a mechanism to spread that bounty to the American people quickly and broadly, then we can easily afford a $1,000 dividend for every American. You say that the freedom dividend uses technology money, uses ostensibly the cost savings that come from automation. But that doesn't seem to be what the funding mechanism is. Well, the funding mechanism, so you look around the rest of the world, you look at social democracies like Scandinavia or UK, and you say, okay, how are they managing this set

of issues? Because Amazon, our trillion dollar tech company, paid zero in taxes last year. They just move it to international havens. They expense a lot of stock options. They just find a way to zero. Now, you're up Schitt's Creek if you have a trillion dollar tech company that's getting rid of 30% of retail jobs and you get zero back in taxes. So then you look around and say, okay, how do other countries get their fair share on Amazon? How do they get their fair share out of Google's new AI trucks? And the most effective way that they've found, every other advanced economy has put in a value added tax. So if you have a value added tax, then you give the American people a slice of every Amazon sale, every Google

search, every robot truck mile, you give it to us for a trickle up economy, but the mechanisms of value added tax. But in practice, doesn't that function as a sales tax? You out of that, that amounts to essentially as if I put slap to 10% sales tax on everything sold in the country, irrespective of the actual mechanism of collecting it. That is the way it would be experienced in many parts of the economy, yes. So it was essentially, it's saying that a flat 10% rise in prices. For certain things, I mean, the actual rise would likely be less in some sectors, but

there'd be like very mild inflation in some sectors, yes. Isn't that a regressive tax? It would be regressive in a vacuum, because obviously if you have less money, then you spend a greater share of your income on various consumer staples. The last thing I would want to do is reduce people's buying power, since obviously we're trying to put money into people's hands. So there are ways around it. One, we're putting all that money plus another chunk of money directly into citizens' hands. Two, if you wanted to, you could exempt consumer staples or true up people's benefits in programs, which I would be very, very open

to. The third thing is you can ramp up the value added tax on things that are only bought by very rich people. There are luxury taxes and the like. But how is that actually taxing the gains from automation? Because it sounds to me from your justification that it's just too hard to get rich people to pay their taxes or get big firms to pay their taxes because they're just so sneaky and smart and you run the risk of capital flights. But other countries have, for instance, I mean, it's not a sexy way to do it, but having a high marginal tax rate for high earners.

Oh, I'm for higher marginal tax rates. I mean, our tax rates are not progressive enough. But one of the things I say to people is like, look, post-divorce, Jeff Bezos is worth maybe $125 billion. How much do you think Amazon's paying him every year? If I increase the marginal tax rate, 70%, whatever it is, how much of Jeff Bezos is $125 billion are we going to get on an annual basis? Next to nothing, really, because he's too smart to have a taxable event on his $125 billion. The way you get the money from Jeff is you take a toll from his trillion-dollar company and then you take a toll when he turns around and spends a billion dollars on space rockets to Mars. It becomes like oxygen where no one can game it, no one

can escape it. And we don't need to reinvent the wheel here. All we have to do is look at other advanced countries who have figured this out and said, it's totally wrong for companies to be profiting and generating hundreds of billions of dollars in revenue from our economy, our society, our people, and not paying back in. But these countries, you know, you're talking about Scandinavia, you're talking about the UK. These countries do have high top marginal rates. They have... Which I am not against at all. Well, they also have things like social wealth funds, sovereign wealth funds.

I'm also for those. But that's not your proposal to a mechanism for funding the UBI. Well, that's the wonder of where we are as a country where we can take this big investment in ourselves. And we're in a privileged position where you can do the investment in us before the sovereign wealth fund. It's just a... It's a happy opportunity for us that we need to take advantage of. The super rich and you talk about this yawning inequality. Is this going to get worse too? I mean, you know, it's like you can see the winner take

all economies. Theoretically, it would get worse. I mean, that's the threat of automation is that capital share of the profits goes way up because now they can cut labor out. Basically, I mean, the thing is, you know, there's a vigorous debate on the left about whether, you know, automation is that big of a threat, you know. And because automation, what it would stand to do is overturn, at least in a short term, a basic Marxist observation about the tendency of the rate of profit to fall, because this would suggest massive, massive profits for the owners of these robots. What have you?

All of which will come to pass. It's already happening. It's just they're too smart to actually show the profits on their books in a way that we can collect taxes on. It just seems to me that of that is not, it's not directly getting the money from the robots. It's not taxing the robot because it leaves the same small number of ultra rich people in control of the automatons that are now producing the value and wealth in society. All right. So let's go through the scenarios that I think are very, very plausible. Okay. So right now you have Google investing billions of dollars in AI to try and drive trucks.

Let's say that they're successful in a decade, trucks are driving themselves. So then freight companies would save a ton of money. They might become more profitable. Google would be able to license this technology for lots of money. So then they might become more profitable. And so then you look at, we're talking about tens, hundreds of billions of dollars a year in value. So right now, do we trust that we're going to be able to get the money off of Google's profitability? I don't. You know what they do right now? They just move it to Ireland. And then Ireland's a tax haven. And then the American people are looking around being like, what do we do? What do we do? You know, if you have something like a value added tax,

you know what happens when the freight company pays Google $10 billion to license the software, we get a slice. When the robot truck mile drives through Nebraska and saves that company money, we get a slice. We get a slice of everything. The problem right now, there's a saying it's like, why do you rob banks? Because that's where the money is. We have to go to where the money is. And the problem right now is that we're chasing these multinationals that can use the tax code. Why did Amazon pay zero in taxes last year? In part, because they got to expense a stock option compensation as a business expense. And then they just do that to the moon. Now, do we have to amend the tax code so that we can try and close these loopholes? Yes. But do we

also have to have a mechanism that makes it like oxygen? That's very hard to game that every other country's already figured out that make sure that we get a slice of all of this incredible innovation. That's what I'm suggesting. But it's still manifested as a tax on consumption. No. I mean, is this waving the white flag and saying, well, Amazon's too powerful to tax capital is just they won. They're too powerful. Oh, they're not too powerful to die. That's what I'm saying. We got to tax them. This is the way to tax them in a way that they can escape. Let me pose a different question then. So under your UBI proposal, that's flat $1,000 a month for every American age 18 to 64. Is that correct? It's actually 18 to expiration. To death? Yes. I read

on your website it ended at 64. Yeah. We consulted with a bunch of people and realized that a lot of folks who've been paying into social security, it was a forced annuity. It wasn't actually accounting for a lot of people's age-related expenses and everything else. So we amended it to expiration and we pay for it in a variety of ways that most people here would probably agree with things like carbon tax, financial transactions tax, ending the means testing for social security payments and a bunch of other things. Well, that's new to me because I just looked on your website and I was familiar with the variation of the proposal where there are three main funding mechanisms. One is the VAT of course. One is the just presumed savings that would come from the

stimulus of giving everyone $12,000 a year. And the other was pulling from the $500, $600 billion or so in current social safety net spending, disability payments, food payments. If people opted for the dividend. And now you're including social security in that? So the thought process initially was that social security starts covering people at 65, but we realized that it's actually not covering people. And so now the dividend is supplemental to social security in that there are additional sources of revenue that make that feasible. So it would not be either, if you are 70 retired in social security, you would just get the thousand. It would not be social security or the dividend.

Yeah, that's right. And we have to look at it. I mean, do we want a country where old people are dying under bridges? Because we know that a lot of people do not have adequate retirement savings. I want nothing to do with that country. But what about if you're on unemployment? Well, unemployment benefits that are... It stacks on top of unemployment benefits that are paid for as part of your work, because a lot of people pay into unemployment insurance while they're working. But most unemployment insurance, as you know, ends in six months or so. About, yeah. I believe there's a lifetime cap to the amount you can draw on it. But it does tend to be more than $1,000 a month, usually. Yeah. But it often ends, though, within

six to 12 months. And that's one reason why I got extended during the recession, because a lot of people were still looking. What about, let's say, your disability recipient? And on average, I believe the median person drawing disability payments draws a little bit more than $1,000 a month. They have to make that choice between taking the disability check or taking the dividend. Yeah, that's right. And when I talk to people on disability, a lot of them would obviously choose their current benefits. But some say that it would be a load off, because right now, they're always afraid their disability is going to disappear. And also, they feel constrained in their ability to even volunteer in the community, because they're

afraid if they get identified as able-bodied, they'll lose their benefits. Oh, absolutely. Absolutely. I mean, if the numbers are pretty close, you might want to take the one without strings attached, particularly when we are... Many jurisdictions are just going out there and trying to prosecute people who are on disability. Yeah. And I talked to someone yesterday who works in welfare, and she said that we have thousands of government employees that she manages that are literally just prosecuting fraud, checking on means testing, seeing whether you still qualify for the benefits you receive. I mean, there's a lot of energy being placed in policing people's behavior in a way that a lot of people would probably prefer to not have to deal with.

Well, let's talk about these disability payments. Let's say you're somebody who gets 1,400 a month on disability. You get the option, do this or take 1,000, and you say, no, I'm going to keep the 1,400. But that's still not a lot of money, because you're a disability, you're not working by definition. You have no other source of income. You are on a fixed income. That's not very much money at all. That means you don't really have that much. When you're doing your budget month to month, you don't have that much margin of error. Yeah, of course not. And chances are you don't have any savings either. If you're on that fixed income and you're not taking the dividend, you put the VAT in place and all of this person's costs are up 10%. Your food

is up 10%. Fuel is up 10%. Potentially, your rent is up 10%, depending on where the VAT's going to put in. So you were worse off then, that person on disability is worse off. The goal here, as anyone can tell, is to put more economic resource into people's hands and not make anyone worse off. So there are two very straightforward ways you could address it. Number one is you is look at the person's disability benefits and say, hey, if your prices are going to go up 8% to 10%, we're going to increase your benefits 8% to 10%, which is a relatively modest increase in the scheme of things. Another possibility would be that you somehow make it so that that person is exempt either by giving them, especially a special like, hey, you're a disability,

and so your VAT proof or excluding so many consumer staples that the impact on that person would be very low, but there are fixes to it. Well, you mentioned that, you say that, but I thought that this plan, the UBI plan, was supposed to ultimately replace these spending programs like that, the more directed interventions, social securities, disability payments, food stamps, things like that. Well, they would end up obviously replacing a proportion of it, because like you said, if someone was close, then they'd be like, oh, I'll take the unconditional. So you'd shrink enrollments, and then you would end up shrinking enrollments over periods of time, because as more people were on the dividend from day one, then it would reduce like, you know, new enrollments

on the various programs. You're also talking about, you know, these kind of ad hoc solutions here, you know, we can exempt certain people from the VAT, or maybe they can apply for, you know, refunds at the end of the year, as you might apply for refund on, you know, your way back from Europe or something for your purchases. Yeah, like those stores in the airport. Yeah, or the stores in the airport, or you can say, you know, we'll just rule certain goods are exempt from the VAT, things like everyone needs, like, you know, basic essentials, toiletry, foods, and things like that. Yeah, there are mechanisms. And as well, it seems like in the political situation where you would pass a VAT, that this is what legislators would spend most of their

time doing, is all these car routes and exemptions. Doesn't that undercut the simplicity of the plan? Isn't the idea that, you know, oh, we have something like the tax code, it's just this big, unwieldy thing, and there are all these exemptions, write-offs, deduction, things like that, and that's how they screw you. That is how they screw you. So, I mean, wouldn't this just end up in much the same way? You know, I don't think it would because of what I said earlier, which is like, you know, you got to go where the money is. If you're trying to balance the economy, the last place you want to go is some person on a fixed disability check and be like, oh, we're going to try and get an extra 10 bucks from you a month. Like, that's not the source of money.

The source of money is Amazon, Google, AI, autonomous, software, big data, robotics, and right now we're in a position to get zero of all of that. So, if you get 10% of a trillion dollars, two trillion dollars, I mean, some of the value that could be produced here is unfathomable, and we're going to get zero of it. So, what we do is we put this in place so that we get our fair share and then we protect our people. What about, say, reducing capital's share and increasing societies, buy-in in large firms and things like that? Well, one of the great things about this, if you imagine a town, you imagine a community, everyone's getting a thousand bucks a month, how many more co-ops are going to be in that town? How many more artists? How many creatives?

How many people are going to be volunteering at their local nonprofit? How many more people are going to be civically engaged? How many more people are actually going to join their friends book club because they're not worried about fucking starving to death? You can produce so many immense benefits by spreading the economic buying power, and yes, it would result happily in more people ending up owners of different enterprises. And as you can tell, I love entrepreneurs. It would be an incredible spur to entrepreneurship for millions of Americans in directions that right now the market will not support. But you compare it to the Alaska Permanent Fund. The Alaska Permanent Fund gets its money from the oil leases. That's where it's a straight line from oil

extraction. Oh, it's a straight line here too. That is the beauty. This is a straight line between our $20 trillion economy and our wallets. Right now, when our economy grows, how much do you see? How much do I see? How much is a person listening to the sea? Zero. But if you put a thousand bucks a month into our hands, that's tied to essentially the value that we are all producing as owners and stakeholders of the society, then when GDP goes up, then we actually are like, okay, good. That means we can afford the dividend a little better. And then maybe like, you know, over time, like, you know, it's like, we can do other awesome things that make our lives a little bit better too. I guess in my mind then, my problem is this, the money has to come from somewhere.

Does capital share go down? Does Jeff Bezos' profits go down under a freedom dividend? Almost certainly, yes. Right? I mean, like you have to see, it's like, if we're taking a toll on every single Amazon transaction, it raises the end prices. 10% more at the end price as well, you know, his domination of the supply chain makes that even easier for him to do as well. If everyone has an extra thousand dollars a month, they can afford the higher prices. Yeah. And the beauty of it is that share remains the same as my point. Well, so there are a couple of different approaches you could take in this instance. But here's the beauty of it is that if we have this buying power in our hands,

then it creates like a virtuous cycle that actually makes us stronger, healthier, mentally healthier, more productive, more free to be able to do the work that we want to do. Like all of these good things. If I were to come and say, hey, we're going to break Amazon up, which in some aspects I am for, we should break up aspects of Amazon. But if I were to turn Amazon into four mini-Amazons, does that help the person listening to this get more money in their pocket? Some of these mark, does that magically revive Main Street like retailers in Indiana? Like it doesn't do any of those things. And, you know, there's obviously like,

you know, I mean, there are legitimate reasons why some of these tech companies should divest parts of their businesses. And I would be all for that. But the goal should be to improve our lives to stay focused on how we're going to make ourselves stronger, healthier, mentally healthier, more able to do the work we want to do. And so if I break up Google into four mini-Googles, that does not actually accomplish the goal of improving the lives of, you know, like people who are struggling in any part of the country. Well, I'm not really talking about monopolization. I'm solely talking about...

Though there's been excess consolidation and I'm four breaking up like... I mean, there has been. That is a real thing. But I think, you know, you break up the companies into four, like you break up Google into four private firms, you still have the same essential problem that there's a very small number of people absorbing maximum profits and outside of what is only necessary for them to pay labor. Yep. And so here's something interesting. You know, the UBI proposal, that's something you've seen all over the political spectrum. Libertarians have mooted a UBI proposal, and anti-capitalists have mooted a UBI proposal, all for different reasons.

And usually when the left suggests something like UBI, generally the argument is this. A UBI, if properly formed, would swing the pendulum towards labor, would increase labor's bargaining power. Because if you have a UBI to fall back on, you don't have to work. I don't have to go work for Jeff Bezos. But this isn't a UBI you could fall back on. Here's like the tough part, man. It's like... So this does 100% strengthen the power of labor. It strengthens the power of every single human. And if you imagine a waitress at a diner who's getting harassed by her boss, if she had a thousand bucks a month coming in, she could tell the boss to shove it,

go home, and survive for a month or two, and then find a job with a non-creepy boss. This would be a built-in strike fund for union workers. And I talked to union leaders about this. This plan was originated by a union guy. It wasn't my plan. It was a guy named Andy Stern, who used to run the SEIU. And he said this would be a strike fund for union workers, because union workers could negotiate and strike a lot harder if their members could go home and not die. So this 100% helps humans. It helps workers. It helps labor. And the key, though, to me is that if you make us all stakeholders of the society, then we can share in the benefits. And I mean, at the extreme end, it's like,

if I give you a thousand bucks a month, are you going to be able to run out and buy a shit ton of Amazon stock? Like, probably not. I don't know what the stock's trading at right now. It's probably pretty expensive. I don't know. I mean, maybe you could buy one share every period of time or something. But in a way, aren't we achieving a lot of the same goals as being a shareholder in Amazon if we're all getting a dividend as a citizen of the country? So there are different rationales from the left that I believe I share for universal basic income. It empowers labor and empowers people. But the main thing to me that I'm focused on is like, how are we going to improve our own lives? And that should be the priority of,

you know, certainly people on the left. It's like, look, like, do you think a thousand bucks a month is going to help improve everyone's life? Heck yes. Then let's make it happen. Well, what you, when you talk about the great displacement, you talk about, you know, apocalypse, all the truckers out of work, all the cabbies out of work, all these people, you know, I mean, right now, trucking is not a good deal. It's a very abusive industry. It's brutal. Holy crap. I've talked to so many truckers, but even, but generally the median salary there is a bit more than 12,000 a year and, you know, significantly higher from people. It's more like 46, 46. I mean, that doesn't compare to 12,000. If we really are looking

at an apocalypse, what's 12,000 going to do? Well, so here's the deal. I become president in 2021. We passed the, we passed the freedom dividend in 2021. The truck driver looks up and is like, wow, president Yang seems to think my job is going to disappear. I'm getting $12,000 a year. I've got five more years of driving a truck. I save, let's say happily, I saved $10,000 a year. I'm at 50,000. My trucking job disappears. I'm getting a thousand bucks a month. I go home and I'm like, okay, what the hell is my next move? Well, my town now, everyone's getting a thousand bucks a month. So there's like a local diner, community center, tutoring center, little league church, like there's a, there's more stuff going on in my community. And I know I'm not going to

die tomorrow because I have tens of thousands in savings. And so then I can at least start to think about my next move in a rational, non rioting way. And like the end, this is not enough. I mean, I also want to appoint a trucking transition czar who then goes to the tech companies and say, hey, $168 billion in savings from automating away those truck driving jobs. That's an awful lot of money. Maybe we should take some of that money and put it to work rebuilding various communities in ways that give some of these three and a half million truckers a path forward. When I was in my twenties and you know, a piece of shit, as I've said, $1,000 a month, I mean, $100 a month would have made a very big difference for me. And $1,000

a month would have been doubled my income for several years. But what also would have helped me immensely would have been not having to pay health insurance premiums, which as you know, I'm for Medicare for all. And you know, we got to get healthcare off the backs of people. Well, what is your version of Medicare for all? Because everyone has a different version now. Yeah. Mine is expand Medicare, lower the eligibility age, phase in over a multi-year period. And I would not get rid of all private insurance, but I would try and outcompete them. And if you do a good job with your public option, then most private insurance disappears. Should there be a maximum income? Should there be a maximum income? Well, again,

I'm for high marginal tax rates. I'm for a way to harvest the gains from some of the outsized wealth and value gains that certain people are getting. But I don't think I would set a maximum. But you would set a minimum. I mean, that's essentially what the freedom dividend is. Why the discussion of a minimum, but not the discussion of a maximum? Oh, it's because you know, you need a certain amount of money to get by and live a good life and where owners and shareholders are the richest society in the history of the world. So giving everyone a thousand dollar dividend, very reasonable. In terms of a maximum, you know, I don't know what I would set up as a maximum.

Though certainly if someone's generating billions and billions of dollars, then you know, some of that needs to come back to the society that made it possible. Certainly. I mean, but you say, you know, you mention $10,000, $12,000 a year, people need a certain amount of money just merely to exist and like live decently, if not great, you know, just not be an abject poverty. But as well, isn't there a point, an income level where anything you're making after that is just, it's gilding the lilies. It's just not necessary because you have all of your needs. One of the jokes I tell is like, if you gave Jeff Bezos a thousand bucks a month, it would have zero impact on anything.

Oh, sure. You'd be changing one digit in one account. No one would even know. Whereas like you said, you give a thousand bucks a month to, you know, the average 20-something year old, it's a game changer. So I don't disagree with you there. I bring up the idea of, you know, not having to pay health insurance premiums, not having to pay medical fees, as well as something that would have helped me is not having to pay rent. And as well, something that would help a universal benefit that would help a lot of people is childcare. And under your proposal, people under 18, they don't get the $1,000. No, they don't. It's a right of citizenship that as an adult, when you become 18, you get

it and have, you know, like learn some financial literacy in high school. It'll be like a great transition to adulthood. Okay, sure. That's fine. But that leaves a lot of people who are poor and have kids in a lurch there because if you're a single parent, two kids, just two, $12,000 a year isn't really going to cut it. And chances are you're using a lot of government benefits. Yeah, yeah. So two things. One, the existing government programs are better structured to support single mom in that situation. But number two, as a parent myself, I've got six and three year old, one of whom is autistic. If you told that single mom of two kids, hey, guess what? When your kids turn 18, they get $1,000 a month. Holy crap, is that a game changer for that single

mom? I mean, maybe like today she's like, well, I wish I had the money now, but I have to like, you know, like suffer until these kids turn 18. What prevents them from, say, going to a usual? But, but then when you go to someone where like you said to them, I mean, think about if you're the single mom and you know each of your kids is getting $1,000 a month starting age 18 for life, that is a game changer. Because like, what do parents freak out about all the time? Like, what's my kids future going to be? How am I going to pay for school? Like, you know, are they going to be able to live on their own? I mean, like if you know your kids actually get the equivalent of hundreds of thousand dollars over their lifetime, I mean, you can look at your

son or daughter in the eye and say, when you turn 18, you're going to get $1,000 a month because your country loves you and values you and we care about you. I mean, that's like a total transformation. It's pretty good. But it doesn't, like you said, it doesn't help that mom right now. And let's say you're a single parent and you just need the cash, you just need the money right now. What prevents you from going to a payday lender from a user and saying, you know, getting charged like something like 30, 40% or freaking someplace upwards of 100% APR? Yeah, so happily they're borrowing against not even just your own check, but your kids check. Yeah, happily they're like any contract against your freedom dividend is unenforceable because you can't have, you know,

financial companies preying on people or people, you know, like the spending like money that like, you know, it's like 40 years into the future. But it's still fungible even if you can't attach it. I mean, it's just, you know, it's the beauty of it again is there's no strings attached, not anything special. It's, it's a thousand bucks. Here you go. I mean, yeah, it prevents me from taking out a personal loan and everyone, even if it's not, even if I can't use that dividend as collateral, everyone knows I get a thousand a month. This is true. And the other thing is that single mom might have like siblings or a cousin or a friend getting a thousand bucks a month. I mean, there are like a million things that she might be able to do that do not involve,

you know, some kind of usurious lender. I want to discuss and you know, we don't have a lot of time left here. I want to know. Let's talk more man. I'm enjoying this. I'm enjoying it too. But again, we don't have a lot of time. This is only booked for another four more minutes. I do want to talk about the political implications. I'll pay to extend it. I want to talk about the political implications of UBI. How does it pass? So here's a great thing. Like right now, I'm running for president. I'm at, you know, two or three percent nationally. But I'm already, as you say, universal basic income is a policy that appeals to people on both sides of the aisle. What is the number one priority for folks on the left? Beating Donald Trump in 2020. I am

already peeling off many, many Trump voters, conservatives, independence, libertarians. Let's say I win the nomination and win in 2020. Now, the Democrats will be so pumped to beating Donald Trump, they will be thrilled to work with a new Democratic president to get more money into the hands of families to make us stronger, healthier. And then the conservatives will look up and say, holy crap, this is a massive win for people in rural areas, for red states on the interior. You know, this is a huge win for my constituencies. And we do not aid 81% of people to pass it. We need 51% of Congress. I can get a few crossovers. We start putting money into people's hands and cash is very hard to demonize. You know, you can't run

out, run against it the way it's like, you say, hey, you're going to have like, you know, you're going to take away your doctors, like you can scare some people and say, hey, the Asian man wants to give you money. It's like, it's very hard to be like the money's going to hurt you. It's like, no, the money's not going to hurt you. You're going to love it. Let's talk snap benefits. Let's say you're you pass the UBI, it's very politically popular. And then a lot of people have to decide, you know, do I take snap benefits? Do I take disability payments? Or do I take the UBI? Some of them take the UBI. That means that the number of people getting snap benefits, number of people getting disability payments, that's lower. Doesn't it become easier then for,

if not this, your presidency, a future president, a future Congress to say, just, you know, all right, well, everyone's got the UBI. We're just eliminating snap. We're eliminating disability payments. Yeah. So there are a couple of things I'd say to this. Number one, it's not like with a lot of people on these programs, they're immune to political assault. We know that conservatives are constantly trying to take hatches to them right now. And it's not like, oh, so many people out there, I can't touch it. Number two, the folks who work in these programs tell me that they are constantly doing triage because they cannot actually talk to or minister or advise all the people that are in the program. You know what I mean? So if you have fewer people

in these various programs, and they'll actually be able to talk to a human, they might be able to get advice, they might not be stressed out about like, you know, not filling out a form correctly and all that other nonsense. So we can actually support the people on the programs the way it's intended to be. But it's not like these programs are politically bulletproof now. They'll actually be more politically bulletproof in an environment where everyone's getting $1,000 a month because you'd be creating a mindset of abundance where people aren't like, oh, you're getting something I'm not getting it, fuck you. It'll be more like, hey, we're all getting it because we're all citizens, we're all awesome. Hey, you're getting a different version of the same thing I'm getting. That's cool

too. Very quickly, is the UBI the end goal or is it the beginning of a something else? Something doesn't move us towards a different world? Yeah, we have to move towards an economy where we write the rules in ways that actually benefit human beings. And we do not have that much time because the market's about to turn on us in historic, unprecedented ways. So the freedom dividends like a foundation, but then we need to build an economy that actually revolves around humanity, the stuff we value, the work we want to do, our relationships, our families, our communities. It's a rewrite that has to start now because it's 2019 and will soon be 2020. And this is the direction we have to go. So the freedom dividend is not the end result, it's the floor. Then we

have to build a house on top of it, a wonderful, wonderful house. Andrew Yang, candidate for the Democratic nomination 2020, thank you so much for joining us. So much fun being here, thank you for the opportunity. Hey, what song do you want for the outro? I was, for some reason, the first thing that popped into my mind was enjoy the silence by the Pesh mode, but I have no idea. I don't know, just you asked me the question and like I thought and it was just like, you know, and then enjoy the silence actually with someone apt because after the outro. I'll run it by Chris, I think he might agree with that one.